New Jersey Inheritance Tax - The Tax of the Week

It is always useful to identify taxes in the state so counterproductive that they deserve special mention. We last examined the recent state sales tax adjustment. Today's examination involved the Inheritance Tax.

So, first the good news. If you die and have a direct family member, either wife or child, you have no issue. New Jersey through its infinite wisdom feels that you don't deserve to have your inheritance taken away.

If you are anyone else, for example a brother or sister in a family farm...the rules change a bit. You get a 25k head start before the state takes 12 percent away from you. Of course, this is where my blood starts to boil.

The state of New Jersey in all likelihood has taxed every cent you have made your entire life while running your farm (or any other business or personal endeavor). You may have had multiple family members work your farm but they might as well be someone on the street. Given that the real estate associate with most family farms in this state is worth more than the farm itself, it triggers the family to get seriously concerned. For example, take a family farm on 20 acres near prime development property, the farm is worth at least 3-4 million dollars in real estate. The state says...give me 12 percent.

This now means that this poor family owes $360,000 minimum to continue the farm. This is a farm they may have worked for 200 years but still owe the money. And you wonder why we have so many farmers selling out to developers. Another casualty of the tax culture of New Jersey.

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